Life Settlement Dictionary

      Life Expectancy

      Life Expectancy is an actuarial gauge for how long a particular individual is expected to live based on their age and health. Generally, the older someone is and the more health problems he/she has, the lower their life expectancy will be.

      Life Insurance Settlement Association

      Founded in 1995, LISA is the most widely recognized trade association representing the Life Settlement industry, LISA participates in educational, legislative and regulatory matters in all 50 states, including Puerto Rico and Canada. Its mission is to promote the development, integrity and reputation of the life settlement industry and to promote a competitive market for the people it serves.

      Life Settlement Broker

      A Life Settlement Broker is a person or company who represents a life insurance policy owner, and on behalf of the policy owner, identifies and negotiates sales contract terms with interested life settlement investors, life settlement providers, and life settlement funders. A Life Settlement Broker will act in the interest of its clients and does not represent any life settlement buyer. Life Settlement Brokers are directly compensated from the life settlement buyer upon completion of the transaction.

      Life Settlement Escrow Agent

      In every life settlement transaction, an Escrow Agent is hired on behalf of both the seller and buyer to establish a level of trust, ensuring all terms of the purchase agreement are met. This is typically an independent entity such as a bank, CPA or specialty escrow company, who holds and processes all documents and funds in the transaction pursuant to instructions.

      Life Settlement Financing Entity

      A Life Settlement Financing Entity is a company who is in the business of providing funds to facilitate the purchase of one or more life insurance policies and who has an agreement in place to purchase policies through a licensed Life Settlement Provider.

      Life Settlement Provider

      A Life Settlement Provider is a company or person who effectuates the purchase of life insurance policies from insureds and policy owners on behalf of the ultimate buyer. Furthermore, a Life Settlement Provider is typically a licensed buyer of life insurance policies in the applicable regulatory jurisdiction.

      Life Settlement / Viatical Settlement License

      Many states require a special license to operate as a Life Settlement Broker, Life Settlement Provider, or Life Settlement Agent. Common requirements are: a life insurance license, a background check, continuing education, and state reporting.

      Premium Finance

      Premium financing is the utilization of borrowing power to purchase a needed life insurance policy.

      Sales Contract / Purchase Agreement

      This is a written agreement entered into by the life settlement purchaser (Provider) and the life settlement seller (Settlor/Viator). This legally binding document will lay out the terms of the life settlement.

      Term Conversion Life Settlements

      Many term policies contain a provision allowing the term life insurance policy to be converted to a permanent product, such as Universal Life. If a product can be converted to a UL product the client may be able to sell his/her term policy in the life settlement market.

      Verification of Coverage (VOC)

      A VOC is a piece of documentation obtained from the life insurance carrier by the Life Settlement Broker. This document is used to establish policy values, dates, and provisions for all parties to review.

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